As we predicted in the previous review, January did not bring any surprises. Business activity was low, the index value gradually decreased. And while in the middle of the month there were faint signs of recovery, but further development they have received.
Related article: In Ukraine, more expensive rental apartmentsIf we talk about the month as a whole, prevailed in the market stagnation, which is a particular stretch of the imagination can be called the traditional winter break.
These winter holidays we used to complete the transition to a new (proper) methodology for determining the indices of the Kiev accommodation. Previous methodology we once gave developers - specialists of the Moscow think tank Earn. But this methodology is oriented to a huge city like Moscow, as well as the ability of a particular think tank, not really suit us.
On the one hand, Moscow is much more sentences, and hence the statistical errors there is considerably less. On the other hand, our information-analytical department, there are many channels of information and expertise from the direct market participants (especially realtors and staff contact center). Because our natural desire to build not only the price proposals, but the price of trades and sales.
For six years we have developed and tested several competing methodologies for determining the indices of the secondary housing market in Kiev. At the same time and worked on improving the methodology, borrowed from the Earn.
Approbation for a long time the different methods and algorithms that allow to choose the most effective. And at the same time possible to reduce the negative impact of transition from one algorithm to another (after all, this transition may cause some changes in the forms of curves, and even "jump" on the chart, which is not related to ongoing market processes).
That's why we went over to the new methodology, step by step over several years. At the final stage changed formation algorithms and analysis of the so-called "core sample". But this is detail, the essence of which is described https://www.domik.net/nedvizhimost/ceny-kiev.html
The principal difference is that we tried as much as possible to take into account information on the prices of sales and trading in specific market segments. Unfortunately, official data on sales there, hence all of (overseas the vast majority of price indices is based on selling prices).
In this review, we have moved away from those forms of supply statistics that are used in the past. The main reason - to change the method of formation of the analyzed samples of objects and, as a consequence, certain changes in the statistical data.
The main innovations are: tightening the rules of selection of objects involved in the definition of statistics; while expanding the number of information sources (including the use of the proposals made in the section "Announcements" real estate portal www.domik.net - before such proposals are not taken into account in determining the statistics ).
In addition, we have added the statistics of prices offers another dimension: the median price of a sample. Under the median price refers to the value of the object that is in the middle of the ordered sample. The number of objects that are expensive, and the number of objects that are cheaper than this, about the same.
Primary housing market
According to official statistics, in 2010 the company completed construction of Kiev by 7,8% less than in 2009, and by 54,2% less than in 2008. At the same time in 2010, was commissioned in 1012 thousand square meters of housing (in 2009, was introduced by 947.9 thousand square meters of housing, and in 2008, 1,430.4 thousand square meters of housing).
Build cheaper did not. On the contrary, the construction of more expensive: according to Goskomstat, the price index for construction and installation work in the construction of houses for 11 months of 2010 increased by 15,6%.
Increasing the number of surrendered housing in these conditions due to simplification of procedures to legitimize previously constructed housing (statistics hit home, built in previous years).
Give an unambiguous assessment of the situation in the construction industry is difficult to Kiev. There are positive factors (the opening of three subway stations, the active construction of road junctions, bridges, light rail).
Despite the difficult financial position, will work on most construction projects are continuing. Major real estate developers find funding sources, including attracting bank loans. At the end of November 2010, the volume of loans taken by non-financial corporations amounted to 44.17 billion hryvnia, and on an annualized basis rose by 7,6%.
Quite possibly one of the developers could use the funds that are provided to maintain the construction industry, as well as assistance waiting list and young families. Now, judging by the Prime Minister's statement, the government reached an agreement with developers to establish the average housing prices in Kiev 8,000 hryvnia per square meter, and for social housing - 4000. Big government order in a crisis - quite capable of supporting the construction industry. True, the sources of financing such construction is only a guess.
There is also information about the infusion of significant resources in developing companies. For example, the company XXI Century was able to significantly improve its position by attracting additional funding.
Unfortunately, the real financial condition of real estate developers, as well as the number of apartments sold, remains a mystery. On most of these things can be judged only from indirect data, so unverified statements of a number of experts. Once again, we can only bitterly stated that the domestic real estate market is not enough not only to paying customers, but also transparency.
Among the many negative factors, a special place is occupied by a sharp decrease in financing activities related to the development of new construction sites. Compared with 2009 and 2008, spending on these projects decreased respectively by 4,3 and 8,4 times. In the coming years, the situation with the construction of housing may be close to critical. Builders have very little for the future. If the state of urgency will not give (give, lease, sell, give to the free use) developers free territory, the builders will have to curtail its activities in Kiev.
Apparently, the leaders of the city and country are well aware. But the free areas in Kiev is very little. Because city officials are looking at carefully to a vast industrial park. A Cabinet rapidly pushing the law "On regulation of urban development", allowing authorities to allocate land for the construction of virtually ignoring the opinion of city residents. Under this law, public hearings will be conducted only when discussing the General Plan and zoning of the city. As for the development of individual territories, there is not only a discussion with the residents will not be, but also control of the officials is sharply limited. Authorities are trying to untie the hands of developers, giving them the right to build facilities that meet the requirements of zoning (eg, in a residential area - houses and other facilities designed to serve the residents). Restrictions on it, seems to be a bit: storey buildings and building regulations.
Maybe overseas, such rules may be acceptable (there is even on your own site tree without a special commission be cut down, and for violation of town planning rules developer threatens huge fines, lawsuits, loss of license, etc.).
We have the same developers often with impunity violate building codes and the rights of others, erecting high-rise building on the playground right next to a neighbor. Now, when they untied his hands, it can start construction, not even agreeing on the project. Obnesut plot by a fence, cut down trees that hinder them, and only then will coordinate the project under a simplified procedure. In this case, law enforcement agencies will be forced to guard the fence and construction of perturbed residents of neighboring houses.
Speaking about the problems of Kiev builders need to emphasize that the problems with the land - it's just the tip of the iceberg. Serious problems with the engineering and transport communications, providing residents with heat, water, electricity. Problems with sewage and stormwater collectors - around Kiev. Bortnicheskaya aeration station and check dams require a lot of money. Repair and renovation of housing demand astronomical sums.
We all need to understand that to build up the area - this one (with the builders sooner or later, right). But to equip it, keep in good condition huge city - it is more serious.
Because if so raise the issue of financing, it is necessary to begin with the challenges of financing for development (or at least maintaining) infrastructure and housing of the city.
Market rental housing
On the eve of New Year's holidays the market of daily rent greatly quickened. So many wanted to celebrate the merry company for someone else's apartment (and better - in a rented cottage); tempted hosts a considerable amount. Someone from the owners agree, others refused, fearing for their furniture, equipment and repairs.
But the holidays have passed. And the rental market again plunged into everyday life. Who recently closely associated with an increase utility tariffs, the expansion of tax and law enforcement services. Wishing to rent or move house in January was a little bit. The rental market, as well as the entire real estate market is clearly felt stagnant. And if that alien word for someone annoying, we are happy to use other: calm, winter vacation ... The meaning of this will not change, but the mood of someone (possibly) improve. In this case - is essential. For a lot of negative emotions accumulated as the tenants and owners of apartments. People oppresses uncertainty, raising utility tariffs, increase in food prices, tightening of tax laws ...
Potential tenants, find out the prices of rent, often pass on the rising tone: it is said, for this wretched apartment close to pay half the family income?! The owners of apartments for their arguments, their negative emotions. Intermediaries in such a situation is extremely difficult to bring the parties together. Put pressure on potential tenants, whose monthly household income of about 5000 hryvnia, it is extremely difficult. Because the vast majority of successful transactions had to give home owners.
Relevant examples (almost all segments of the market) - a lot. That's fairly typical. Apartment, for which would 3000grn, passed for 2600grn. Like 5500grn - handed over 4700grn. Like $ 1000 - handed over $ 700. Like $ 850 - handed over $ 770.
Conceding to the price, the apartment owners often try to pass on to tenants the additional costs associated with an increase in utility bills. The contracts are increasingly appears clause stating that in case of increase of utility bills, the landlord has the right to raise rents.
The main demand is for one-and two-bedroom apartments of economy-class near the metro. The composition and price proposals are presented below
The forecast for February 2011
In February, a winter vacation real estate market is likely to continue. Business activity (at least in the first half of the month) will be low, prices will gradually decline.
Transactions will take place mainly where vendors put up prices by 12-18 percent below average in a particular market segment. It is these trends we have seen in recent months. And there is no reason to believe that these trends will change significantly in February. To change the pricing trends need to revive the market, and in February it is hardly worth waiting for.
More detailed consultation at (044) 537-77-77
Information-analytical department of real estate portal www.domik.net